California Proposes Numbers for Indirect Land Use Change Emissions

California issued a staff report last week for its “Proposed Regulation to Implement the Low Carbon Fuel Standard.” As expected, the rule proposes a measure of indirect land use change emissions for select biofuels – corn and sugarcane ethanol and soy biodiesel. The report defines the assumptions behind the analysis – in a word, that use of existing crops for biofuels reduces supplies, increases prices, and thereby induces agricultural expansion:

Land use change effects occur when the acreage of agricultural production is expanded to support increased biofuel production. Lands in both agricultural and non-agricultural uses may be converted to the cultivation of biofuel crops. Some land use change impacts are indirect or secondary. When biofuel crops are grown on acreage formerly devoted to food and livestock feed production, supplies of the affected food and feed commodities are reduced. These reduced supplies lead to increased prices, which, in turn, stimulate the conversion of non-agricultural lands to agricultural uses. The land conversions may occur both domestically and internationally as trading partners attempt to make up for reduced imports from the United States. The land use change will result in increased GHG emissions from the release of carbon sequestered in soils and land cover vegetation.”

In addition to releases of 90 percent of above-ground carbon in the first year, and 25 percent of below-ground carbon over a period of 30 years, the ILUC penalty calculated by California says, “The carbon that would have been sequestered in the lost cover vegetation is also included in the total emissions value.”

A letter signed by more than 100 researchers and biofuel company executives and sent to California Gov. Schwarzenegger on March 2 calls the analysis being conducted by California “unusually sensitive to the assumptions made by the researchers conducting the model runs.” It also points out that the concept of an indirect effect is only being proposed for biofuels, even though, “Petroleum, for example, has a price-induced effect on commodities, the agricultural sector and other markets.”

California’s analysis does account for the direct land use change effects of oil drilling – within California. However, despite an acknowledgment that, “The cost of energy appears to have been the largest contributor” to the recent sharp increase in corn prices, the report does not analyze the possible indirect land use effect of that oil price shock.

Further, the report indicates that the evidence one would expect to see of indirect land use change caused by using corn for biofuels is lacking:

The model predicts, for example, that the expanded use of domestic corn for the production of ethanol will reduce U.S. corn exports. That prediction appears to be inconsistent with the actual trade data appearing in Appendix C. Those data show that the production of corn, soybeans and wheat in the United States has generally been on the increase over the last decade. Exports meanwhile have remained relatively steady. In the case of corn, production increases have been sufficient to supply the ethanol industry while maintaining export levels.”

So, despite any inconvenient contrary evidence, California’s Air Resources Board concludes precisely what it assumes from the beginning – that Midwest corn ethanol emits more CO2 than California gasoline.